Battening Down the Hatches

President Trump’s 2018 budget blueprint proposes $54 billion in spending increases for defense, infrastructure, and veteran affairs, but massive cuts in other areas, including the environment, health and human services, foreign aid, job training, the arts, research, and after-school programs. Although escaping the ax in the omnibus spending bill that extends through September 2017, funding for independent agencies like the National Endowment for the Arts and Public Broadcasting Service may be eliminated entirely in the 2018 budget.

Reflecting the pulse of organizations nationwide, nearly two-thirds of respondents to the California Association of Nonprofits post-election survey of more than 800 nonprofits reported increased levels of staff anxiety over issues such as immigrant beneficiaries’ fear of using services and uncertain funding. In fact, of respondents receiving government funding, nearly two-thirds anticipated reduced funding in the next 12 months. Notably, almost one-third indicated recent changes to their fundraising message. More optimistic respondents thought budget cuts might be offset by extensive tax reform, putting more money in the pockets of individuals and corporations. More than one-third anticipated increased philanthropic revenue from individual donors. (Indeed, the President’s recently released proposal for overhauling the tax structure retains deductions for charitable giving and is good news for nonprofits.)

Separately, many experts note that the proposed budget is more of a blueprint for Congress than a bill for the President to sign or veto. They expect that it will change significantly during the legislative process, with hundreds of members of Congress drafting their own proposals before anything is passed. Rather than alleviate concerns, this expectation only adds to the uncertainty.

As an executive director of a national health care nonprofit put it, “The city is nervous, the county is nervous, the state is nervous, the nation is nervous. Everyone in the public funding pipeline is holding back. Nobody knows what to expect in terms of the federal budget’s impact on funding critical safety-net services like the ones our agency provides.”

But waiting for the federal cuts fallout is like waiting to see how destructive a hurricane is before battening down the hatches. Now is the time for nonprofits to evaluate the situation, and identify current funding sources, strengths, and potential vulnerabilities. They must resist the knee-jerk response of making immediate or deep cuts to budget and staff, and instead gather data while thinking through the short-term and long-term impact of decisions.

No matter what the forecast, it serves to be prepared. Here are three strategies to consider, whatever the future brings.

1. Leverage the news.

Endless opportunities exist for organizations to leverage topical issues and stories. The key is being agile and jumping in. We recently witnessed The American Civil Liberty Union (ACLU) attract more than $24 million in online gifts during a single weekend (more than six times its typical annual online giving). It did this by leveraging Trump’s crackdown on undocumented immigration to draw attention to its “See You in Court” campaign. With social media activity and advertising, the campaign trended on Twitter for days, garnering matching gifts from high-profile celebrities and hundreds of offers of pro bono help from attorneys. As a result, the ACLU expanded legal, advocacy, and communications teams while beefing up its Washington, DC office.

Today, a video can go viral on social channels in a matter of hours. They can draw national or local attention and conversation for days, and potentially inspire giving from people who never even knew your organization existed. Even if your nonprofit doesn’t have national stature or a media platform, you can still leverage the news in email blasts, newsletters, and conversations with supporters, donors, and potential donors. If normally bipartisan and nonpolitical, find ways to align your mission with national issues (such as employment, women’s rights, or the opioid epidemic) so that you can insert your organization into a national dialogue quickly and effectively. An environmental group entrusted with a prominent waterway, for example, is now considering messaging that goes beyond saving the ecosystem, to how a cleaner environment translates to more jobs for families and a vibrant local economy. Bring your communications team and board together to proactively discuss your positioning so that you’re ready to move as quickly as the news cycle moves when opportunity arises.

2. Form meaningful partnerships with companies.

Rather than simply making gifts, corporations are increasingly getting involved hands-on through social good and corporate citizenship programs. In fact, the days of companies staying neutral on social issues might be nearing the end. More and more C-Suite leaders are speaking up on issues—whether immigration bans, transgender rights, human trafficking, climate change, education, poverty, or women’s rights—even when they are unrelated to the company’s business.

Politics aside, nonprofits that partner with companies are securing not only financial support, but also critical manpower and expertise that can lower costs. Anti-hunger nonprofit Feeding America, for example, teamed up with Walmart, which provides food and refrigerated trucking and logistics expertise. Perkins School for the Blind partnered with Google.org to develop a micronavigational app that helps visually impaired people maneuver the gap between GPS and the real world. And Microsoft invites nonprofit leaders to pitch ideas that leverage company employees’ tech skills for social benefit.

This trend is not limited to the world’s largest corporations—companies of all sizes are building philanthropic activity into corporate missions. Surveys have shown that about 75 percent of small businesses donate about six percent of profits on average to nonprofits each year. Donations from small businesses in support of local facilities, for example, help the YMCA of Greater New York meet annual fundraising goals.

3. Tap into the power of women.

Women are becoming more powerful and influential through philanthropy. Of the 50 biggest donors during 2016, 6 were women, and 20 women were part of couples whose gifts totaled between $25 and $900 million. Sheryl Sandberg led the way with more than $107 million in gifts to various causes. Roxanne Quimby and Annette Simmons directed their respective $94 million and $51 million giving to parks, and Suzanne Dworak-Peck invested $60 million in social work.

When reviewing potential donor lists, nonprofits shouldn’t overlook the enormous giving power of women. Often under-cultivated and under-solicited, women today are uniting around big issues that threaten to limit their progress or the progress of missions they care about. Research shows that women in high-net-worth households are far more likely than men to give based on philosophical or political beliefs. Women are also more likely than men to give when serving on boards, and they tend to give locally, so nonprofits should seek out women within their region to serve on their boards.

Nonprofits will continue to face challenges in the days ahead. Regardless of who is in the White House, sustainability comes from facing challenges and seeking opportunities with both intentionality and creativity.

Elizabeth Zeigler is President and CEO of Graham-Pelton Consulting, a leading global fundraising and nonprofit management firm.

Data historically is collected by those in power, about those without it, to make decisions about the future. If you work in the social good sector, you can’t ignore this history. So how do you practice socially responsible data? Consider attending MIT Media Lab data scientist Rahul Bhargava’s Data on Purpose presentation to answer this pressing question. Learn more at ssirdata.org #SSIRData https://www.facebook.com/social.innovation/photos/a.189678813942/10157907531163943/?type=3

When Nurse-Family Partnership first experimented with
collecting simple client feedback, they received a
tremendous response—both affirmations of the work they do, and helpful suggestions for improvements. Over the past few years, they have realized a significant return on investment by implementing client feedback into their model. Learn more in this audio slideshow featuring Alexa Cares, NFP’s feedback manager. (Part of a series produced for SSIR with the support of the William and Flora Hewlett Foundation) #feedbackempowers https://ssir.org/videos/entry/integrating_feedback_across_a_nonprofit_business_model

Nudges rooted in behavioral economics can profoundly influence the amount that people donate and the choices they make about which organizations to support. Dean Karlan, Piyush Tantia, and Sarah Welch share 10 suggestions to improve giving. http://ow.ly/RW3d30nk8Ka

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